Juicy Estates: Mortgage Blog

Hand Crafted Jumbo Loans – The Key to Luxury Home Sales

As I mentioned in my post  “The Rise of The Regionals ~ Filling The Funding Gap” some smaller more nimble lenders with true private mortgage banking offerings are providing the financing solutions needed to complete transactions in the luxury housing market. The feedback I have received from that original post has been very positive however many readers were not familiar with the solutions that are offered by portfolio lenders to facilitate transactions in the luxury market, solutions that the big box lenders do not offer.

Below is a list of the most common techniques, and their associated definitions that we are currently utilizing to help facilitate transactions in the luxury home market.

Bridge loan: a bridge loan is typically a line of credit or in some instances a mortgage secured by a buyer’s current home to be utilized for the down payment on a new property. Once the purchase of the new home is completed the original home is sold and the proceeds are used, in part, to pay off the bridge loan balance. (Also see cross collateralization)

Asset dissipation: this technique is used when additional qualifying income is needed for a buyer. Through the use of an assumed rate of return and time frame we can calculate a hypothetical monthly cash flow that a buyer could derive from their liquid assets and use this income for qualifying purposes.

Cross collateralization: is the use of two or more properties and/or assets owned by the same party as the security for a mortgage. By using multiple properties we can lower or even eliminate the down payment requirements and/or secure better terms on the mortgage for the property being purchased.

Collateral substitution: collateral substitution is the removal of one property as the security for a mortgage in favor of a new property. Substitutions of this nature are offered for existing clients with portfolio loans and alleviate the need for a new mortgage thus lowering closing costs on the new property.

Pledge assets: the pledging of stocks, bonds or other liquid asset as additional collateral for a new mortgage. In addition to the property itself, pledged assets can be used to secure a lower down payment requirement and/or more favorable terms on the mortgage.

Many potential buyers of luxury homes are being discouraged from taking advantage of the tremendous values that are available in the housing market by lenders that either do not offer solutions of this nature or simply are not aware that these solutions exist.

If you would like to learn more about the flexible finance options that are available for luxury home buyers please feel free to call or write.

305-476-5539

jvenney@gibraltarprivate.com

This entry was posted on Friday, June 19th, 2009 at 6:00 am and is filed under Home, Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. What to Expect From a Jumbo Mortgage Loan | afcmortgagefl.com said at June 27th, 2009 at 10:27 am

   [...] Jumbo Loan Solutions For Luxury Homes Miami | Juicy Estates [...]

2. What are Mortgage Rates Like in Colorado? are They Different? | afcmortgagefl.com said at July 9th, 2009 at 9:43 am

   [...] Jumbo Loan Solutions For Luxury Homes Miami | Juicy Estates [...]

3. jumbo home mortgages said at March 17th, 2011 at 5:29 am

   I like the tips and information of this blog. So keep sharing useful information.

Leave a Reply

Name

Email (will not be published)

Website